Renowned worldwide for its natural beauty, temperate climate and unique culture, Hawaii is a top vacation destination. It can also be an alluring place to live. The islands boast low crime rates and an abundance of recreational activities.
Deciding which island to call home however, can be a daunting question. The state’s major inhabited islands vary in character, affordability, opportunity, population size and pace of life:
Oahu: The most populated of the islands by far, Oahu is the location of Hawaii’s capital city, Honolulu. Honolulu County, which encompasses the entire island, is home to 1,016,508 people, according to the 2020 Census.
Hawaii: Hawaii is not just the name of the state but also the name of the largest island in the archipelago, often referred to as “the Big Island.” Known for its diversity, the island of Hawaii boasts the world’s tallest mountain, 266 miles of coastline and five national parks. It’s the second most populated island with just over 200,000 residents.
Maui: The second largest Hawaiian island geographically, Maui is famous for its stunning beaches, as well as for producing sugar and pineapples.
Kauai: Lush scenery, picturesque waterfalls and striking canyons are the highlights on Kauai. It’s the fourth largest Hawaiian island.
Molokai: The island of Molokai is known for being protective of its unique culture and identity. A significant percentage of the population is Native Hawaiian, and island residents actively work to preserve a rural lifestyle.
Lanai: For years, most of the island of Lanai was a pineapple plantation. However, tourism is now emerging on the island.
As a remote island archipelago where many consumer goods must be shipped from other places, the steep cost of living in Hawaii is well-known. And like much of the rest of the country, inflation has been driving the cost of living on the islands even higher.
Hawaii statistics
Hawaii is the most expensive state in the country to live in, according to World Population Review rankings. As of December 2021, the median price of a home in Hawaii was $1.06 million, according to real estate firm Locations Hawaii. However, it also has the fourth lowest poverty rate. Here are some of the state’s key characteristics.
Hawaii’s population has been decreasing for five years running. The most recent Census data shows the population as of July 2021 at about 1.4 million people, which was a decline of .7 percent from one year earlier. The Hawaiian islands are fourth in the nation for population decline, behind Illinois, New York and the District of Columbia.
Rental costs in Hawaii
Like so many other aspects of life in Hawaii, renting an apartment is very costly. It’s the country’s second most expensive state for renters.
The median price for a one-bedroom apartment in Honolulu is $1,630, according to 2022 data from Zumper, a rental listing platform. That’s an 11.6 percent increase over a year earlier. The cost of a two-bedroom is about $2,180, which is about 9.5 percent more expensive than one year ago.
There’s a severe shortage of affordable rentals across the state of Hawaii, a crisis that’s being driven in part by many landlords selling their properties and evicting tenants. Real estate sales have increased 40 percent over the past two years.
Hawaii has a 56.6 percent homeownership rate, with about 279,960 owner-occupied homes versus 185,339 renter-occupied units. Skyrocketing rents and dwindling inventory has been particularly challenging for longtime residents, including blue collar workers and service industry workers. Both rent and mortgage payments are prohibitive in the current overheated real estate market.
Housing costs in Hawaii
Similar to many other places in the country, real estate sales are on a hot streak in Hawaii at the moment. The median price of homes in December 2021 was $1.06 million, a 22 percent increase from 2020, according to Locations Hawaii.
The past six quarters have been the busiest in the history of Hawaii’s real estate market, with some buyers entering into purchase contracts without having even visited or seen a property.
Skyrocketing home prices are being driven by various factors, including record low inventory, two years of low mortgage rates and an influx of buyers who are freed up by remote work conditions and office shutdowns.
This overheated housing market has dramatically impacted the cost of living in Hawaii, making it difficult for many working families to make ends meet or find affordable housing.
Job market in Hawaii
As the COVID-19 pandemic becomes less of an issue, the job market in Hawaii has improved. Between October 2020 and 2021, Hawaii witnessed the largest unemployment rate decrease of any state in the country. There was a 7.7 percent decline, with unemployment dropping from 14 percent to 6.3 percent. As of March 2022, the unemployment rate had decreased further, to 4.1 percent, according to the U.S. Bureau of Labor Statistics.
A number of large, well-known employers maintain headquarters on the islands. The five largest are:
COMPANY NUMBER OF PEOPLE EMPLOYED
Tesora 14,300
Hawaii Pacific Health 6,621
Hawaiian Airlines 6,356
Hawaii State Teachers Association 4,667
Kyo-Ya Hotels Resorts LP 4,000
While tourism is a major economic engine for the state, employing a significant number of people locally, there’s also a large demographic of fully remote workers on the islands. A report published in February by the state Department of Business, Economic Development and Tourism showed that an estimated 42 percent of private sector employees were working remotely as of August 2021. That figure is largely driven by much stricter COVID-19 mitigation measures by state and local governments.
Bottom line
Offering a pleasant climate year round, unmatched natural beauty and an abundance of recreational activities, Hawaii has a lot to offer. But the island lifestyle comes at a steep price. Currently facing a rental crisis as well as skyrocketing home purchase prices amid a highly competitive market, Hawaii continues to be one of the most expensive places to live in the country.
Taken from an article written by Mia Taylor
Former Contributing Writer for BANKRATE.COM
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